This article is an excerpt from the Shortform book guide to "High Output Management" by Andrew S. Grove. Shortform has the world's best summaries and analyses of books you should be reading.
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What are the best quality control methods? How can you implement them in your organization?
There are three main quality control methods that can help you maintain consistency in your organization. You’ll need to take all of these factors into account when thinking about how to control the behavior of people in your company.
Read more about quality control methods and how they apply to your organization.
Quality Control Methods
Quality control methods are about more than just production. IN fact, you can apply the idea of quality control to your organization and the people in it. There’s no universally optimal way to control people’s behavior—the most effective approach always depends on the circumstances.
There are three ways to control your behavior and the behavior of others. We encounter all three modes throughout our lives, including in the workplace:
Method #1: Free-Market Forces
This is one of the quality control methods. In this mode, people’s behavior is controlled by price and self-interest. Whoever is buying wants to pay the lowest price, and whoever is selling wants to sell at the highest price possible. None of the parties care about the other—they’re concerned only with their own wants. Therefore, you should use this control method when the parties are mainly motivated by self-interest and the complexity, uncertainty, and ambiguity (CUA) of the circumstances are low (for example, what’s bought and sold has a value in dollars).
- (Shortform example #1: Buying a car is managed by free-market forces—the salesperson wants to make as much money as possible, and the buyer wants to spend as little as possible.)
- Example #2: Manage new grad hires using free market forces because they’re motivated by self-interest (they haven’t been at the company long enough to feel loyal to it) and the CUA is low (entry-level jobs have well-defined responsibilities).
No management is needed when using this method because everyone openly follows self-interest.
Method #2: Contracts
In this second mode, behavior is controlled by mutually agreed-upon guidelines that outline what each party will do to what standards and who has the right to monitor. Contracts are useful when exchanging goods or services that don’t have a defined value, like the contribution of an individual engineer. Use this method when parties are mainly motivated by group interest and CUA is low. Contracts is one of the quality control methods that can help define value.
- (Shortform example #1: If you ask someone to ghostwrite a memoir for you, you can’t encompass the entirety of the job with a list. Instead, you might establish guidelines that specify that you give the writer a certain amount of money, and they give you their best effort.)
- Example #2: An electrical company might sign a contract with the government to establish that no other company is allowed to sell electricity in a particular location. In exchange for the monopoly, the contract would give the government the right to control the price of electricity.
Management is needed in this method—management helps set and enforce the guidelines.
Method #3: Culture
In this last mode, behavior is controlled by culture—people believe and trust that the whole group shares ways of doing things, values, and goals. Culture is a useful control method when it would be impossible to define dollar values or contracts because the circumstances change quickly or are unclear. Therefore, use this method when the parties are mainly motivated by group interest and CUA is high.
- (Shortform example: Brenan is a member of a strategic planning community even though this isn’t required by his job description. He joined the group because he feels he should use his skills to help the company—the company culture promotes such behavior.)
Management’s role is to develop and establish culture, which you can do in two ways:
- Verbally explain your behavioral expectations.
- Lead by example. Behave in a way that emulates the culture you want to see.
(Note that when the parties are motivated by self-interest and the CUA is high, no control method works effectively.)
You can use these quality control methods to ensure your company runs smoothly.
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Here's what you'll find in our full High Output Management summary :
- How to increase your managerial output and productivity
- The 11 activities that offer a higher impact on output
- How meetings can be used as a time management tool
